It has become widely recognised that the traditional view of psychosis as a dichotomous entity is inadequate. This review aims to consider research in the context of a continuum model of psychosis, and to ask what determines whether anomalous or psychotic experiences lead to some individuals requiring care from mental health services and others not. Quantitative and qualitative differences in psychotic experiences and distress have been found that may help to answer this important question. There is evidence that appraisals may mediate development of psychosis and need for care. How these appraisals are formed is explored. Trauma has been implicated in the development of psychosis and maladaptive appraisals but the evidence is controversial. Social support and understanding is also considered and may be protective against the transition to psychosis and development of delusions. There is a need for further research to look at whether and how anomalous experiences and maladaptive appraisals are associated with traumatic early and current life events and social environment.